Tippets 'Cautious, But Positive' North Island Will Recover

North Island Credit Union President/CEO John Tippets said he's "cautious but positive" he can right the struggling credit union's course.

NCUA examiners have been on-site at North Island this week, where, as of Dec. 31, net worth dropped to 3.39%, ROA is -3.52% and the loan quality ratio is a problematic 6.20%. However, Tippets told the Credit Union Times the federal regulator is only conducting a scheduled exam. Management and regulators anticipated the San Diego credit union's $52 million year-end net loss, he said.

Tippets, who spent 17 years running the $5 billion American Airlines FCU, said he's realistic about the California economy and upside down homeowners abandoning loans.

But, he said, North Island has three "P's" going for it: good people, effective processes and 195% provision coverage. Business lending is also a strength.

With economists predicting a sluggish recovery, why not just merge with mammoth Navy Federal Credit Union, which shares North Island's legacy field of membership?

Tippets said only one-third of North Island's 95,000 members have a military connection.

"We have very few natural merger matches, so to stand alone is probably most beneficial to our members," he said. "We have 70 years of history, brand and attachment to our community, and we want to be successful."